Stocks Party Like It's 1999
On Wall Street, the millennium concluded with a bang, with the Dow, Nasdaq and S&P 500 climbing into record terrain in shortened trading Friday.
Dealings were extremely thin throughout the session with trading desks staffed by skeleton crews. Trading ceased at 1 p.m. ET, ahead of the New Year's holiday.
Larry Wachtel, senior market analyst at Prudential Securities, said the notable element was that there haven't been any Y2K-related glitches thus far.
"Australia, New Zealand and Japan all reached the new year without any problems," Wachtel said.
As for the market's performance in January, Wachtel said the challenge will come from the potential for hefty profit-taking, as participants sell shares of many of the high-flyers to realize the capital gains that had been deferred in 1999.
The Dow Jones Industrial Average rose 44.26 points, or 0.4 percent, to 11,497.12.
The Nasdaq Composite added 32.12 points, or 0.8 percent, to 4,068.99. The tech gauge is up a record-setting 85 percent for the year and had 61 record closes in 1999.
The Standard & Poor's 500 Index added 0.3 percent, while the Russell 2000 Index of small-capitalization stocks grew by 1.6 percent.
Volume was thin, checking in at 377 million on the NYSE and at 751 million on the Nasdaq Stock Market. Breadth improved with winners besting losers by 15 to 13 on the Big Board and by 20 to 19 on the Nasdaq.
John Waterman, managing director of investments at Rittenhouse Financial, said he's been surprised by the stock market's liquidity and resilience, with buyers piling into shares until the very end of the new year.
While there has been some participation from a broader array of names in the past week or so, the momentum remains with the technology sector heading into the new millennium.
"Tax-loss selling has been a factor, and we've watched the weaker stocks get weaker while [the strong get stronger] as profit-taking [is delayed]," Waterman noted.
Within the market, semiconductors were strong, while Internet issues languished with the Goldman Sachs Internet Index off 0.4 percent. Retail stocks were on a roll, posting hefty gains for a second-straight session after rallying earlier in the week as well.
In the interest-rate sensitive group, financials and bank shares fell, as did utilities, hurt by the climb in bond yields Friday.
In the bond market, Treasury issues sold off Friday following two straight sessions of gains, as investors shunned fixed-income issues and the new millennium commenced in Asia without any Y2K glitches.
There's no economic data on tap Friday. The next major report hits Monday, when the National Association of Purchasing Management index is released, which will give the market a first peek into the performance of the manufacturing sector in December.
But next Friday's employment report will be key in determining the market's direction over the next few weeks as it's the main piece of dta ahead of the Fed's Feb. 1-2 policy-setting meeting.
The 30-year bond fell 19/32 to yield 6.48 percent after climbing for the last two trading sessions.
In currency markets, the buck was mixed in thin dealings. Dollar/yen was trading at 102.32, off 0.1 percent from Thursday's close, while euro/dollar shed 0.1 percent to 1.0074.